sustained EB-3 Case: Construction

U.S. Department of Homeland Security 
20 Mass. Ave., N.W., Rm. 3000 
Washington, DC 20529 
U.S. Citizenship 
and Immigration 
Services 
PUBLIC COPY 
Date: SEP 0 8 2.006 
SRC 04 145 52188 
PETITION: Immigrant petition for Alien Worker as a Skilled Worker or Professional pursuant to Section 
203(b)(3) of the Immigration and Nationality Act, 8 U.S.C. 8 1153(b)(3) 
ON BEHALF OF PETITIONER: 
INSTRUCTIONS: 
This is the decision of the Administrative Appeals Office in your case. All documents have been returned to 
the office that originally decided your case. Any further inquiry must be made to that office. 
Robert P. Wiemann, Chief 
Administrative Appeals Office 
Page 2 
DISCUSSION: The preference visa petition was denied by the Director, Texas Service Center, and is now 
before the Administrative Appeals Office (AAO) on appeal. The appeal will be sustained. The petition will 
be approved. 
The petitioner is a construction company. It seeks to employ the beneficiary permanently in the United States 
as a construction manager. As required by statute, the petition is accompanied by a Form ETA 750, 
Application for Alien Employment Certification, approved by the United States Department of Labor (DOL). 
The director determined that the petitioner had not established that it had the continuing ability to pay the 
beneficiary the proffered wage beginning on the priority date of the visa petition. The director denied the 
petition accordingly. 
The record shows that the appeal is properly filed, timely and makes a specific allegation of error in law or 
fact. The procedural history in this case is documented by the record and incorporated into the decision. 
Further elaboration of the procedural history will be made only as necessary. 
As set forth in the director's February 14, 2005 denial, the single issue in this case is whether or not the 
petitioner has the ability to pay the proffered wage as of the priority date and continuing until the beneficiary 
obtains lawful permanent residence. 
Section 203(b)(3)(A)(i) of the Immigration and Nationality Act (the Act), 8 U.S.C. $ 1153(b)(3)(A)(i), 
provides for the granting of preference classification to qualified immigrants who are capable, at the time of 
petitioning for classification under this paragraph, of performing skilled labor (requiring at least two years 
training or experience), not of a temporary nature, for which qualified workers are not available in the United 
States. Section 203(b)(3)(A)(ii) of the Act, 8 U.S.C. fj 1153(b)(3)(A)(ii), also provides for the granting of 
preference classification to qualified immigrants who hold baccalaureate degrees and are members of the 
professions. 
The regulation 8 C.F.R. $204.5(g)(2) states in pertinent part: 
Ability of prospective employer to pay wage. Any petition filed by or for an employment- 
based immigrant which requires an offer of employment must be accompanied by evidence 
that the prospective United States employer has the ability to pay the proffered wage. The 
petitioner must demonstrate this ability at the time the priority date is established and 
continuing until the beneficiary obtains lawful permanent residence. Evidence of this ability 
shall be in the form of copies of annual reports, federal tax returns, or audited financial 
statements. 
The petitioner must demonstrate the continuing ability to pay the proffered wage beginning on the priority 
date, which is the date the Form ETA 750, Application for Alien Employment Certification, was accepted for 
processing by any office within the employment system of the DOL. See 8 C.F.R. fj 204.5(d). The petitioner 
must also demonstrate that, on the priority date, the beneficiary had the qualifications stated on its Form ETA 
750, Application for Alien Employment Certification, as certified by the DOL and submitted with the instant 
petition. Matter of Wing's Tea House, 16 I&N Dec. 158 (Act. Reg. Comrn. 1977). 
Here, the Form ETA 750 was accepted on October 9, 2002. The proffered wage as stated on the Form ETA 
750 is $27.20 per hour ($56,576.00 per year based on a 40 hour work week). The Fonn ETA 750 states that 
the position requires a bachelor of science degree in civil engineering and three years of experience in the job 
offered. 
The AAO takes a de novo look at issues raised in the denial of this petition. See Dor v. INS, 891 F.2d 997, 
1002 n. 9 (2d Cir. 1989)(noting that the AAO reviews appeals on a de novo basis). The AAO considers all 
pertinent evidence in the record, including new evidence properly submitted upon appeal.' On appeal, 
counsel submits the petitioner's IRS Forms 1120, U.S. Corporation Income Tax Returns, for 2002 and 2003, a 
letter dated March 3, 2005 from the petitioner's accountant, the petitioner's unaudited financial statements for 
fiscal years 2001 and 2003, the petitioner's previously submitted unaudited financial statements for fiscal year 
2002, the petitioner's IRS Forms W-3, Transmittal of Wage and Tax Statements, for 2002, 2003 and 2004 and 
the petitioner's IRS Forms W-2, Wage and Tax Statements, for 2002 and 2003. Other relevant evidence in 
the record includes the beneficiary's IRS Forms 1040A, U.S. Individual Income Tax Returns, for 2002 and 
2003 and the beneficiary's IRS Forms W-2, Wage and Tax Statements, for 2002 and 2003. The record does 
not contain any other evidence relevant to the petitioner's ability to pay the wage. 
The evidence in the record of proceeding shows that the petitioner is structured as a C corporation. On the 
petition, the petitioner claimed to have been established in 1987 and to currently employ 24 workers. 
According to the tax returns in the record, the petitioner's fiscal year begins on August 1 and ends on July 3 1 
each year. On the Form ETA 750B, signed by the beneficiary on September 16, 2002, the beneficiary 
claimed to have worked for the petitioner fkom May 2000 to the date he signed Form ETA 750B. 
On appeal, counsel submitted the petitioner's financial statements for fiscal years 2001, 2002 and 2003 and 
the petitioner's federal income tax returns for 2002 and 2003 as evidence of the petitioner's ability to pay the 
proffered wage. Counsel also submitted the petitioner's IRS Forms W-3 for 2002, 2003 and 2004 and the 
petitioner's IRS Forms W-2 for 2002 and 2003 as evidence of the petitioner's ability to pay the proffered 
wage. In addition, the petitioner's accountant asserts in a letter dated March 3, 2005 that the corporate income 
tax returns were prepared with the cash basis of accounting and, therefore, indicate different results from the 
amounts he lists in the letter for the petitioner's net income, net current assets and retained earnings for fiscal 
years 2001, 2002 and 2003. Counsel asserts that the petitioner's net income was greater than the difference 
between the proffered wage and the wages paid to the beneficiary and that the petitioner's net current assets 
have always been greater than the proffered wage. Further, the petitioner's accountant recommends the use of 
retained earnings to pay the proffered wage and states the wages paid to the beneficiary were included on the 
petitioner's federal income tax return on page 2, Schedule A, line 3-cost of labor. Counsel also states that the 
petitioner indicated on the petition that the position was a "new petition" because the proffered job is a 
permanent position, as opposed to the beneficiary's H-1B position with the petitioner, which is a temporary 
position." 
The petitioner must establish that its job offer to the beneficiary is a realistic one. Because the filing of an 
ETA 750 labor certification application establishes a priority date for any immigrant petition later based on the 
ETA 750, the petitioner must establish that the job offer was realistic as of the priority date and that the offer 
remained realistic for each year thereafter, until the beneficiary obtains lawful permanent residence. The 
1 
The submission of additional evidence on appeal is allowed by the instructions to the Form I-290B, which 
are incorporated into the regulations by the regulation at 8 C.F.R. 9 103.2(a)(l). The record in the instant case 
provides no reason to preclude consideration of any of the documents newly submitted on appeal. See Matter 
of Soriano, 19 I&N Dec. 764 (BIA 1988). 
2 
 This office notes that wages paid to the beneficiary by the petitioner in 2002 and 2003 will be considered in 
the determination of the petitioner's ability to pay the proffered wage. 
Page 4 
petitioner's ability to pay the proffered wage is an essential element in evaluating whether a job offer is realistic. 
See Matter of Great Wall, 16 I&N Dec. 142 (Acting Reg. Comm. 1977). See also 8 C.F.R. 
 204.5(g)(2). 
In determining the petitioner's ability to pay the proffered wage during a given period, Citizenship and 
Immigration Services (CIS) will first examine whether the petitioner employed and paid the beneficiary 
during that period. If the petitioner establishes by documentary evidence that it employed the beneficiary at a 
salary equal to or greater than the proffered wage, the evidence will be considered prima facie proof of the 
petitioner's ability to pay the proffered wage. In the instant case, the beneficiary's IRS Forms W-2 establish 
that the petitioner employed and paid the beneficiary $40,160.00 in 2002 and $44,090.00 in 2003. 
Therefore, for the years 2002 and 2003, the petitioner has not established that it employed and paid the 
beneficiary the full proffered wage, but it did establish that it paid partial wages in both years. Since the 
proffered wage is $56,576.00 per year, the petitioner must establish that it can pay the difference between the 
wages actually paid to the beneficiary and the proffered wage, which is $16,416.00 in 2002 and $12,486.00 in 
2003. 
If the petitioner does not establish that it employed and paid the beneficiary an amount at least equal to the 
proffered wage during that period, CIS will next examine the net income figure reflected on the petitioner's 
federal income tax return, without consideration of depreciation or other expenses. Reliance on federal 
income tax returns as a basis for determining a petitioner's ability to pay the proffered wage is well 
established by judicial precedent. Elatos Restaurant Corp. v. Sava, 632 F. Supp. 1049, 1054 (S.D.N.Y. 1986) 
(citing Tongatapu Woodcraft Hawaii, Ltd. v. Feldrnan, 736 F.2d 1305 (9th Cir. 1984)); see also Chi-Feng 
Chang v. Thornburgh, 71 9 F. Supp. 532 (N.D. Texas 1989); K. C. P. Food Co., Inc. v. Sava, 623 F. Supp. 1080 
(S.D.N.Y. 1985); Ubeda v. Palmer, 539 F. Supp. 647 (N.D. Ill. 1982), aff'd, 703 F.2d 571 (7th Cir. 1983). 
On appeal, the petitioner submitted its IRS Forms W-3, Transmittal of Wage and Tax Statements, for 2002, 
2003 and 2004 as evidence of the petitioner's ability to pay the proffered wage. Reliance on the petitioner's 
wage expense is misplaced. Showing that the petitioner paid wages in excess of the proffered wage is 
insufficient. 
For a C corporation, CIS considers net income to be the figure shown on Line 28 of the Form 1120, U.S. 
Corporation Income Tax Return. The record before the director closed on January 19, 2005 with the receipt 
by the director of the petitioner's submissions in response to the director's request for evidence. As of that 
date, the petitioner's 2004 federal income tax return was not yet due. Therefore, the petitioner's income tax 
return for 2003 is the most recent return available. The petitioner's tax returns demonstrate its net income for 
2002 and 2003. as shown in the table below. 
In 2002, the Form 1120 stated net income of -$74,970.00. 
In 2003, the Form 1120 stated net income of -$38,387.00. 
Therefore, contrary to counsel's assertion, for the years 2002 and 2003, the petitioner did not have sufficient 
net income to pay the difference between the wages actually paid to the beneficiary and the proffered wage. 
If the net income the petitioner demonstrates it had available during that period, if any, added to the wages 
paid to the beneficiary during the period, if any, do not equal the amount of the proffered wage or more, CIS 
will review the petitioner's assets. Net current assets are the difference between the petitioner's current assets 
and current liabilitie~.~ A corporation's year-end current assets are shown on Schedule L, lines 1 through 6 
3 
According to Barron 's Dictionary of Accounting Terms 1 17 (3'* ed. 2000), "current assets" consist of items 
Page 5 
and include cash-on-hand. Its year-end current liabilities are shown on lines 16 through 18. If the total of a 
corporation's end-of-year net current assets and the wages paid to the beneficiary (if any) are equal to or 
greater than the proffered wage, the petitioner is expected to be able to pay the proffered wage using those net 
current assets. The petitioner's tax returns demonstrate its end-of-year net current assets for 2002 and 2003, 
as shown in the table below. 
In 2002, the Form 1120 stated net current assets of -$152,738.00. 
In 2003, the Form 1120 stated net current assets of -$99,608.00. 
Therefore, contrary to counsel's assertion, for the years 2002 and 2003, the petitioner did not have sufficient 
net current assets to pay the difference between the wages actually paid to the beneficiary and the proffered 
wage. 
Thus, from the date the Form ETA 750 was accepted for processing by the DOL, the petitioner had not 
established that it had the continuing ability to pay the beneficiary the proffered wage as of the priority date 
through an examination of wages paid to the beneficiary, or its net income or net current assets. 
On appeal, the petitioner's accountant asserts in a letter dated March 3, 2005 that the corporate income tax 
returns were prepared with the cash basis of accounting and, therefore, indicate different results from the 
amounts he lists in the letter for the petitioner's net income, net current assets and retained earnings for fiscal 
years 2001, 2002 and 2003. The petitioner's tax returns were prepared pursuant to cash convention, in which 
revenue is recognized when it is received, and expenses are recognized when they are paid. This office 
would, in the alternative, have accepted tax returns prepared pursuant to accrual convention, if those were the 
tax returns the petitioner had actually submitted to IRS. However, as indicated above, the petitioner failed to 
submit its complete tax returns in response to the director's RFE and, therefore, the AAO will not consider the 
sufficiency of the petitioner's corporate income tax returns submitted on appeal. 
This office is not persuaded by an analysis in which the petitioner, or anyone on its behalf, seeks to rely on 
tax returns or financial statements prepared pursuant to one method, but then seeks to shift revenue or 
expenses from one year to another as convenient to the petitioner's present purpose. If revenues are not 
recognized in a given year pursuant to the cash accounting then the petitioner, whose taxes are prepared 
pursuant to cash rather than accrual, and who relies on its tax returns in order to show its ability to pay the 
proffered wage, may not use those revenues as evidence of its ability to pay the proffered wage during that 
year. Similarly, if expenses are recognized in a given year, the petitioner may not shift those expenses to 
some other year in an effort to show its ability to pay the proffered wage pursuant to some hybrid of accrual 
and cash accounting. If the accountant wished to persuade this office that accrual accounting supports the 
petitioners continuing ability to pay the proffered wage beginning on the priority date, then the accountant 
was obliged to prepare and submit audited financial statements pertinent to the petitioning business prepared 
according to generally accepted accounting principles. 
On appeal, counsel submitted the petitioner's financial statements for fiscal years 2001, 2002 and 2003. The 
regulation at 8 C.F.R. $ 204.5(g)(2) makes clear that where a petitioner relies on financial statements to 
demonstrate its ability to pay the proffered wage, those financial statements must be audited. An audit is 
conducted in accordance with generally accepted auditing standards to obtain a reasonable assurance that the 
having (in most cases) a life of one year or less, such as cash, marketable securities, inventory and prepaid 
expenses. "Current liabilities" are obligations payable (in most cases) within one year, such accounts 
payable, short-term notes payable, and accrued expenses (such as taxes and salaries). Id. at 118. 
Page 6 
financial statements of the business are free of material misstatements. 
 The accountant's report that 
accompanied those financial statements makes clear that they are reviewed statements, as opposed to audited 
statements. The unaudited financial statements that counsel submitted with the petition are not persuasive 
evidence. Reviews are governed by the American Institute of Certified Public Accountants' Statement on 
Standards for Accounting and Review Services (SSARS) No. 1 ., and accountants only express limited 
assurances in reviews. As the account's report makes clear, the financial statements are the representations of 
management and the accountant expresses no opinion pertinent to their accuracy. The unsupported 
representations of management are not reliable evidence and are insufficient to demonstrate the ability to pay 
the proffered wage. 
Further, the petitioner's accountant recommends the use of retained earnings to pay the proffered wage. 
Retained earnings are the total amount of a company's net earnings since its inception, minus any payments 
made to stockholders. Retained earnings are shown on a corporate tax return on Schedule L and, unlike the 
current assets shown elsewhere on Schedule L, retained earnings actually represent part of stockholders' 
equity and represent the portion of a company's non-cash and non-current assets that are financed from 
profitable operations rather than from selling stock to investors or borrowing from external sources. Assets of 
a company's shareholders or of other enterprises or corporations cannot be considered in determining the 
petitioning corporation's ability to pay the proffered wage. See Matter of Tessel, 17 I&N Dec. 63 1 (Act. 
Assoc. Comm. 1980). 
Although CIS will not consider gross income without also considering the expenses that were incurred to 
generate that income, the overall magnitude of the entity's business activities should be considered when the 
entity's ability to pay is marginal or borderline. See Matter of Sonegawa, 12 I&N Dec. 612 (Reg. Comm. 
1967). The petitioning entity in Sonegawa had been in business for over 11 years and routinely earned a 
gross annual income of about $100,000. During the year in which the petition was filed in that case, the 
petitioner changed business locations and paid rent on both the old and new locations for five months. There 
were large moving costs and also a period of time when the petitioner was unable to do regular business. The 
Regional Commissioner determined that the petitioner's prospects for a resumption of successful business 
operations were well established. The petitioner was a fashion designer whose work had been featured in 
Time and Look magazines. Her clients included Miss Universe, movie actresses, and society matrons. The 
petitioner's clients had been included in the lists of the best-dressed California women. The petitioner 
lectured on fashion design at design and fashion shows throughout the United States and at colleges and 
universities in California. The Regional Commissioner's determination in Sonegawa was based in part on the 
petitioner's sound business reputation and outstanding reputation as a couturiere. As in Sonegawa, CIS may, 
at its discretion, consider evidence relevant to the petitioner's financial ability that falls outside of a 
petitioner's net income and net current assets. CIS may consider such factors as the number of years the 
petitioner has been doing business, the established historical growth of the petitioner's business, the overall 
number of employees, the occurrence of any uncharacteristic business expenditures or losses, the petitioner's 
reputation within its industry, whether the beneficiary is replacing a former employee or an outsourced 
service, or any other evidence that CIS deems relevant to the petitioner's ability to pay the proffered wage. 
In the instant case, the petitioner was incorporated in 1987. The petitioner's gross sales were $2,887,605.00 
in 2002 and $3,133,626.00 in 2003. The petitioner paid salaries, wages and other labor costs of over 
$500,000.00 in 2002, 2003 and 2004. The petitioner established that it employed 19 employees in 2002 and 
26 employees in 2003. Thus, assessing the totality of circumstances in this individual case, it is concluded 
that the petitioner has proven its financial strength and viability and has established that it has the ability to 
pay the proffered wage. 
The evidence submitted establishes that the petitioner had the continuing ability to pay the proffered wage 
beginning on the priority date. 
The burden of proof in these proceedings rests solely with the petitioner. Section 291 of the Act, 8 U.S.C. 
tj 136 1. The petitioner has met that burden. 
ORDER: The appeal is sustained. The petition is approved.